Transcript

TONY JONES, PRESENTER: In the midst of the fiery debate about its hospitals plans the Federal Government could well have re-ignited another one.

The deputy prime minister has re-opened the schools funding debate laying out the details for a review of Commonwealth support for private and public schools.

And on the health front, the Prime Minister's risked inflaming his fight with Victorian Premier John Brumby by linking the Labor Leader with Tony Abbott.

From Canberra Emma Griffiths reports.

EMMA GRIFFITHS, POLITICAL REPORTER: Another day, another hospital but this one came with a glowing endorsement for Kevin Rudd.

But what he's trying to do is facing stiff resistance. Victoria and Western Australia are refusing to give up any of their GST money to fund the hospital plan.

TROY BUSWELL, WA TREASURER: Until those issues are resolved it's highly unlikely that Western Australia would offer its support.

EMMA GRIFFITHS: The Victorian Premier has been leading the charge and the Prime Minister has decided he now has two leaders in opposition to take on.

KEVIN RUDD, PRIME MINISTER: We will not accept a recipe for inaction by either Premier Brumby or for that matter Mr Abbott.

Mr Brumby and Mr Abbott seem to have a whole list of excuses for delay. It seems to boil down to Mr Brumby and Mr Abbott saying the current system is good enough.

EMMA GRIFFITHS: The Federal Opposition Leader stepped off his bike ending his nine day pollie-pedal odyssey.

TONY ABBOTT, OPPOSITION LEADER: Mr Rudd is having quite enough trouble persuading his state Labor colleagues without necessarily needing any further criticism from me.

EMMA GRIFFITHS: He'll surely be ready to step in in the unlikely event that the leaders agree on Monday.

KEVIN RUDD: It's a tough debate it's going to be a huge fight.

EMMA GRIFFITHS: The government is courting another potentially huge fight, spelling out its plans to review school funding, a long process that was promised during the election campaign and will begin later this month.

The Education Minister's well aware that any review is likely to reignite the private versus public funding debate.

JULIA GILLARD: I fully expect the opposition lead by Mr Abbott to start an irresponsible fear campaign to try to start scaring schools to say that they will start losing money.

EMMA GRIFFITHS: And she will start with the counter attack.

Emma Griffiths, Lateline.

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